Medicaid modernization will take hundreds of millions and require more staff

Florida’s health care regulation agency is setting the stage for an expensive rebuild of the computer systems that bind the state’s multibillion dollar Medicaid program even though state legislators have not agreed to pay for it.

The Agency for Health Care Administration has dropped three different invitations to negotiate with vendors that can update the state’s antiquated Medicaid management information systems and is expecting responses on the three requests by early- to mid-December.

In hopes of having contracts inked between the summer and fall of 2022, the agency is assembling for each Invitation to Negotiate (ITN) two multiagency teams — one to evaluate the vendors’ responses and the other to negotiate with vendors that received top evaluation scores.

Now all the agency needs is the Florida Legislature to approve its legislative budget request for $117.8 million so it can pay the vendors for the needed work. It’s a number that one top House Republican already suggested may be “excessive.” 

Currently, the Medicaid management information system is a single integrated system for claims processing and information retrieval. But AHCA wants to transform that into a modern modular system that connects with other data sources and programs.

Florida Health Care Connections, or FX, is the moniker AHCA assigned to the transformation of the system and the subsequent modular procurements necessary to make it happen. Florida lawmakers have already appropriated more than $158 million over the past five budgets for the replacement of the system responsible for billing and payment to the managed care companies, doctors and pharmacies providing health care to millions of Floridians enrolled in Medicaid.

FX Program Director Mike Magnuson told members of the FX Executive Steering Committee on Wednesday the latest budget request for the upcoming fiscal year 2022-2023 budget, “includes the funding to start the contracts that we now put out on the street. So the majority of it will be the fixed price deliverables for those functions.”

In addition to requesting the $117.8 million to help initially pay the three ITNs, Magnuson told FX Steering Committee members the agency requested another $1.97 million to hire 12 full-time employees who can provide ongoing support to the office that will be created to help with the system.

Without the funding, Magnuson said, the agency would be reliant on paying contracted staff in order to operate the FX updates.

But Rep. Bryan Avila, the South Florida Republican charged with leading efforts to assemble a health care budget in the House of Representatives, recently questioned the size of the agency’s legislative budget request by asking if the project total was inflated.

Meanwhile, the three ITNs AHCA published have a combined value of nearly $350 million over a seven-year period.

The first ITN AHCA will award is for modular “unified operations centers” services. The contract would be in effect between Aug. 1, 2022, and July 31, 2029, and could be worth more than $161 million.

The second ITN AHCA will award is for modular provider management services.The system must allow for concurrent processing of enrollment and plan credentialing activities for both initial enrollment as well as renewals. According to the ITN, the contract would be in effect from Sept. 1, 2022, through Aug. 31, 2029, and would be worth more than $33 million.

The third ITN the agency will award is for so-called core systems and is expected to be worth $154.5 million. According to the ITN, the contract would be in effect between Nov, 1, 2022, and Sept. 30, 2029. 

“We are getting to the point where the rubber is starting to meet the road,” AHCA Secretary Simone Marstiller told members of the FX Executive Steering Committee. “It’s all starting to come together.”